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ECONOMY | 26-09-2019 09:29

New IMF chief meets briefly with Finance Minister Lacunza

"I look forward to working with the authorities when I assume my duties on October 1. Argentina is an important member of the IMF and we want it to do well," Kristalina Georgieva posts on Twitter after meeting Finance Minister Hernán Lacunza.

The new managing director of the International Monetary Fund, Kristalina Georgieva, met briefly on Wednesday with Finance Minister Hernán Lacunza, as speculation over Argentina's relationship with the institution escalated.

The IMF's new chief, who the organisation's board confirmed on Wednesday would succeed Christine Lagarde, said on Twitter afterwards that she looks forward to working with Argentine officials when she formally assumes her post.

"I look forward to working with the authorities when I assume my duties on October 1. Argentina is an important member of the IMF and we want it to do well," Georgieva posted on Twitter.

No details emerged about the meeting, nor if it lasted any longer than a passing greeting.

Earlier this week, representatives from the Fund – including the IMF's interim managing director, David Lipton – met with Lacunza, President Mauricio Macri and Central Bank chief Gustavo Sandleris. 

In an interview published yesterday, Lipton said Argentina's financial programme would be put on hold until after October's presidential election.

The IMF will “work toward an eventual resumption of a relationship – some kind of financial relationship with them – which may have to wait awhile,” Lipton told Bloomberg Radio on Wednesday. “Argentina’s situation right now is extremely complex.”

His remarks are the clearest indication yet that the IMF’s record US$56-billion agreement with Argentina is on ice for now, including a US$5.4-billion loan disbursement that’s been up for approval since September 15. The deal suffered a major blow when President Mauricio Macri lost August's PASO primary vote to Peronist rival Alberto Fernández.

Macri’s defeat unleashed a currency crisis that forced him to implement capital controls and other measures that may violate key terms of the IMF deal. For his part, Fernández hasn’t yet presented an economic programme nor announced who will lead his economic team, although he had called for a revision of the IMF deal. Investors now see a 95-percent chance of default in Argentina within the next five years.

According to reports that emerged on Thursday morning, Alberto Fernández's economic team are on the same page as the IMF, having previously asked the Fund to half the disbursement of more cash until after the election.

– TIMES/AFP/BLOOMBERG

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